RESTRUCTURING PLAN: MAS to cancel some old contracts and trim workforce by 10pc, say officials

MALAYSIA Airlines (MAS) will close several departments for a day under its restructuring plan, which will see it terminating some old contracts and reducing the workforce by more than 10 per cent.

Business Times understands that all departments will be affected except for in-flight services, which comprise the technical and cabin crew and the engineering division.

Company officials said MAS is targeting May 28 for the major restructuring.

MAS has also decided to cancel some contracts that are squeezing its profits and sign new agrements at competitive rates, they said.

"By cancelling some of the contracts, MAS will be able to save more than RM200 million a year," said an official.

He said MAS will also let go of excess workers and re-look the salaries of staff, including those in key management positions.

"This is the first step in returning to the black. The next step is to streamline operations, look at more profitable routes and change the top management."

MAS has about 20,000 workers.

The airline embarked on a massive restructuring plan at the end of 2011 with the aim of reducing costs and returning to full profitability last year. Despite the restructuring, MAS lost RM4 billion in three years.

Analysts said MAS should spend less on mass-market advertising and start rebuilding its brand through other means that do not increase expenditure.

"MAS should also explore new opportunities in the airline industry to diversify its income stream," said an analyst.